Ethanol industry files to take LCFS fight to the Supreme Court

By Growth Energy and Renewable Fuels Association | March 20, 2014

Following the January decision by the Ninth U.S. Circuit Court of Appeals to deny rehearing en banc in the litigation regarding California’s Low Carbon Fuel Standard, the Renewable Fuels Association and Growth Energy are today petitioning the U.S. Supreme Court for certiorari to make a final determination relating to the constitutionally flawed LCFS.

“California, through adoption of the LCFS, has violated the most basic, structural features of interstate federalism. LCFS not only discriminates against out-of-state commerce, but it seeks to regulate conduct in other States in direct contravention of our constitutional structure and at the direct expense of Midwestern farmers and ethanol producers.”

RFA and Growth Energy moved forward with a Supreme Court challenge after a divided panel of the Ninth Circuit Court of Appeals reversed a District Court (O’Neill, J.) finding that the California LCFS discriminates against interstate commerce and constitutes extraterritorial regulation in violation of the Commerce Clause. By its own admission, California’s LCFS seeks to regulate greenhouse gas (GHG) emissions occurring in other states by rewarding and punishing industrial and agricultural activity taking place outside California. And it bases the size of these rewards and penalties on whether production took place in California or in the Midwest—systematically favoring California. The Constitution denies states such authority.

1 Responses

This is not a correct statement of how the LCFS works. California does not systematically favor California production. The determination of whether a biofuel gets more LCFS credits turns solely on that fuel's carbon intensity (CI), i.e., how much greenhouse gas is produced by that fuel through a well-wheel analysis.
To demonstrate that California does not discriminate against mid-West producers in favor of California producers, corn ethanol produced in California has essentially the same CI score as corn ethanol produced in the mid-west. Furthermore, sugarcane ethanol produced in Brazil, which is burdened by a 2.5% import duty imposed on it by the Federal government, has a much lower CI score than any biofuel produced in California or the mid-West due to the green biomass of the sugarcane plant, which is taken to the biorefinery when the cane ethanol is produced and then burned in a boiler to generate the electricity to power the plant, with the excess sent to the electric grid.
Furthermore, the Supreme Court should not take the case via the writ of certiorari as the case is not yet "ripe" for Supreme Court review. That's because the Court of Appeals sent the case back to the District Court for further action when it rendered its decision. The RFA and Growth Energy might therefore prevail at the District Court level, which means that the plaintiffs have not exhausted all of their possibilities at the lower court level. I make this comment as a lawyer and longtime member of the California Bar.